Time Will Run Back (45 page)

After ten weeks on the island, Peter was strong enough to sit down to his piano again. As he played Haydn, Mozart, Bach, Brahms, Schubert, Edith Robinson sat entranced.’ “It seems a pity, chief. A man with your gifts—a man who can play as beautifully as you—wasting his time in politics!”

This peaceful life was almost enough to cause him to forget the war. But never quite. With each new surge of strength he felt also a new surge in his sense of responsibility. At the end of fourteen weeks he said to the doctor: “If you try to hold me here for more than another week, I will no longer follow your orders.”

He cabled Adams that he would return the next week to take over.

That evening, after she had finished reading to him, Edith said: “The doctor tells me you want to go back.” Her eyes were cast down. For the first time she was not looking straight at him or smiling.

He placed one hand on her shoulder, raised her chin with the other, and looked into her eyes: “I want to tell you, Edith, how much your care has meant to me. You have been a wonderful nurse.... You know, you’d make some man a wonderful wife “

Suddenly he knew that he was in love with her, and that the man he was thinking of was himself.

Adams had conducted the purely military operations of the war with brilliance. Already the forces of Freeworld had regained a foothold in Ireland. They were widening it, and establishing and maintaining air bases. They had captured the initiative.

But at home Peter found the economic situation chaotic, and a threat to further military progress. Prices of most things had nearly doubled. Other prices were at their old level, but in these cases the goods were scarce or unobtainable. Essential war production had actually been brought to a stop at some points because of unbalanced output or bottlenecks. As a whole, war production methods seemed inexcusably wasteful.

Peter tried to find out the reasons for all this for himself, and then asked Adams for his own explanation.

“Let’s begin with money,” said Peter. “Where are all the gold coins? They seem to have disappeared completely, and now I find only paper certificates ‘entitling’ the holder to a gold coin which he can’t in fact get.”

“That came about by a series of steps,” Adams said. “I really think the present arrangement is a great improvement. First of all, it seemed to me unsafe in wartime to leave gold coins in the hands of the public.”

“Why?”

“Well, they might hoard them.”

“Did they?”

“No; but they might have started to at any time. Gold is a war resource, and all war resources should be in the hands of the government.”

“Go on.”

“Well, first of all it struck me as illogical, chief, to have gold coins stamped as to their weight and fineness merely by a private goldsmith. That didn’t seem to me to give enough assurance to those who were offered the coins. The reputation of the stamper might be merely local, or not warranted; and the receiver might be compelled to make his own assay—”

“But, in fact,” broke in Peter, “wasn’t the business of stamping gold coins being done more and more by just a few well-known firms, like Lloyd’s and Morgan’s? And wasn’t that precisely because these firms did have a Freeworldwide reputation for care and integrity, and because their coins therefore had a wider and quicker acceptability?”

“I just don’t feel,” said Adams, “that the stamping of money can be left to private hands. The maintenance of a sound and uniform currency seems to me obviously a governmental function—”

“Go on.”

“So I called in all the coins to be re-assayed, reweighed, melted down and re-stamped with the government’s own stamp. This made a completely uniform—and incidentally, I think, a much handsomer currency. I hired first-rate artists—”

“Go on.”

“Well, after I had got the new coins all stamped, it seemed to me ridiculous to turn them all back to their owners, who might only hoard them instead of putting them to use. Gold is a weapon of war, and ought to be enlisted for the duration.”

“Go on.”

“So it occurred to me that all I really had to do was to let the people who had turned in their gold coins keep the
receipts
for them! The receipts represented the pledged word of the government itself. There’s nothing better than that, of course; so all I had to do was to make the receipts transferable—”

“Go on.”

“I wish you wouldn’t keep interrupting me just to tell me to go on!” “Go on.” “So what I did was to let the receipt holders turn in their receipts for a freely transferable receipt, payable not to a specific person but to ‘bearer.’ And I must say, I think I made these receipts very durable and good-looking. They were on an expensive paper, skillfully and beautifully engraved, so that they could not be easily counterfeited—”

“And they promised to pay the actual gold on demand?”

“Precisely! They were just like a warehouse receipt! Only of course I issued an order, chief, that no one could get the actual gold until after the war was over.”

“I see. No one was entitled to get his own property back until you said so.”

“I am actually protecting that property, chief, better than the owners could themselves. I am having enormous underground vaults built in the middle of the continent, near Winnipeg, which will be guarded by troops day and night.”

“In other words, you are putting all your eggs in one basket. So that Bolshekov’s paratroopers would only have to go to one place with the assurance of getting all our gold instead of having to extract it from each of 200,000,000 persons, each with his own hiding place.”

“I can’t accept that argument. I—”

“Go on.”

“Well, it didn’t take me many weeks to learn that a shooting war is a very expensive business, chief. I needed money and needed it quick; so I hit upon a marvelous way of solving the problem!”

“Yes?”

“I simply issued more of the engraved warehouse receipts for gold!”

“Against what?”

“Against nothing. What did it matter? People couldn’t get the gold anyway! And the new warehouse receipts circulated as money just as freely as the old, and at parity with them.” “Particularly as you made their acceptance at that rate compulsory.”

“Of course.”

“What would happen, Adams, if at the end of the war every holder of this paper money were to turn it in for gold?”

“I don’t think he will. Why should he? The paper circulates just as well as gold, and is just as acceptable. And it’s lighter and handier to carry. We don’t need a 100 per cent gold backing, because there will never be a 100 per cent turn in.”

“No doubt if there
were
100 per cent gold backing,” said Peter, “and everybody knew it, you would be right in saying that there would never be a 100 per cent turn in. People wouldn’t bother to ask for gold as long as they knew they were certain to get it.”

“Precisely!” exclaimed Adams. “Don’t you see what a wonderful economy I’ve achieved? I’ve hit upon a wonderful new monetary technique, comparable, if I may presume to say so, to your own discovery of the free enterprise system!”

“Just a moment,” continued Peter. “It is true that people wouldn’t ask for gold as long as they knew they were certain to get it. But they would start asking the moment they felt there was any doubt about their getting it. You yourself know this. Otherwise you wouldn’t have forbidden people to ask for their gold, or refused to pay it out. Now the minute you issue, say, 200 claims to goldgrams against only 100 actual goldgrams, and the people know that this is the situation, then every holder will know that only the first hundred claims can be honored; so everyone will rush to be among that first hundred, and your marvelous new technique will collapse.”

Adams was silent for a few minutes. “I simply had to raise money,” he said at last.

“Don’t you think it was dishonest to issue claims for gold against nonexistent gold?” persisted Peter. “If a private individual did that, you would throw him in jail as a cheat and a swindler!”

Adams looked deeply hurt. “I don’t think the two cases are comparable. The government has the taxing power and can use it to get whatever resources it needs to meet its obligations after the war. We have to win this war, and get money in the quickest way we can. And besides, maybe we could turn this whole gold thing into a sort of fiction. What good is gold, anyway? You can’t eat it. Why should people want it instead of paper, which circulates as money just as well?”

“On that argument, you can deprive the people of anything on the ground that they are irrational in wanting it.”

“But isn’t the desire for gold merely a silly superstition—?”

“I’m not going to waste time arguing the alleged irrationality of other people’s wants,” cut in Peter sharply. “I’m simply going to point out to you the practical effects of what you have actually done. Prices of goods have nearly doubled—”

“Because of the scarcities of goods brought about by the war,” said Adams.

“That’s what I thought you would say,” Peter answered. “But that’s only true of a few specific commodities. It’s only a very small part of the
general
explanation. People can’t offer more money for
all
goods unless they have more money to offer. Let’s get back to what I assumed we had both learned several years ago. What is a ‘price’? It is a
relationship
between the value of a commodity and the value of the monetary unit. If the monetary unit is a gram of gold, then the so-called ‘price’ of an article is the relationship between the value of that article and the value of a gram of gold. If, other things equal, an article gets scarcer, its price will go up. But if the article gets no scarcer at all, but the supply of monetary units increases, then the price of the article will also go up—because the value of the monetary unit, in which the price is expressed, has gone
down!”

“You mean,” said Adams, “that every price really reflects two things—not only the value of the particular commodity priced, but the value of the monetary unit in which it is priced?”

“Exactly,” said Peter. “Every price is a
ratio
between two values.”

“That’s a rather ingenious way of looking at it!”

“It’s not ingenious at all,” said Peter, spurning the compliment. “It applies to all measurement. When I say that the length of a yard is three feet I am merely talking about a ratio between a foot and a yard, and that ratio won’t remain unless
both
lengths remain what they are. Let’s say this office is twenty feet wide, and next week you issue an order saying that hereafter the foot is only six inches long. Then the office becomes forty feet wide, though it hasn’t grown a bit.”

“That’s not a bad idea,” said Adams, grinning. “It would be a way of making all rooms seem larger.”

“And in the same way, cheapening the value of the monetary unit, Adams, is a way of making everybody’s income seem larger. And fools are fooled by it. Now look what you’ve really done. You’ve about doubled the quantity of money outstanding. And therefore you’ve about doubled the prices of goods, because the value of the monetary unit is not much better than half its previous level. If you increase the supply of wheat, you lower the value of each individual bushel of wheat. Now there is another way of doing the same thing. You can sell ‘short’ in the speculative markets wheat that you haven’t got to deliver, and therefore you can temporarily increase the apparent supply of wheat on the market and temporarily depress its price. Or you can issue certificates and
call
them the equivalent of a bushel of wheat, and force everybody to take them as such.”

“But I’ve raised money for the government; I’ve raised money to conduct the war!” protested Adams.

“And you did it in such a way,” said Peter, “as to kick around economic relationships, to cheat people dependent on fixed monetary incomes, and to reward and penalize people without relationship to their real productive contribution or lack of it. And so you’ve helped to throw discredit on the profit-and-loss system that we made possible at the risk of our lives....”

He paused.

“What do you intend to do now?” asked Adams quietly. “Do you want to recall all the extra money outstanding? That would bring about a panic in the middle of the war.”

“You’re right,” agreed Peter. “Prices would fall; profit margins would be wiped out; manufacturers would shut down; workers would be asked to take lower wages and wouldn’t understand why; unemployment would develop, and resentment and bitterness; new injustices would be created, without necessarily correcting more than a few of the old.... No; we couldn’t withdraw the extra money from circulation. But that is only another reason why you shouldn’t have issued it in the first place!”

“What do you intend to do, then?” Adams asked.

“At least we can stop issuing any more, Adams. At least we can freeze the circulation where it is. We can increase taxation, and float bond issues to be paid for out of people’s savings—”

The telephone rang. It was Hamilton, the Secretary of Defense.

“Our forces have just captured the airfield outside of Edinburgh, chief! In a week the whole of Scotland should be in our hands!”

I’M sorry,” said Adams, “but whatever caused the increase of prices, at least I tried everything to stop it. For example, I put maximum price ceilings on the necessaries of life—”

“I was coming to that,” said Peter. “Let’s take the case of beef.”

“I’m glad you pick beef,” said Adams, “because I acted with great boldness there. You remember that before the war beef was selling at only 50 cents a pound. I kept seeing it climb till it doubled to a goldgram a pound. Then I acted. I ordered the price rolled back to 50 cents a pound—”

“Why?”

“Because a goldgram a pound is outrageous.”

“Why? Because you were used to seeing it at only 50 cents a pound?”

“Well... partly that. But the sellers of beef were profiteering.”

“Any more than anybody else? On the average, didn’t most prices double? Didn’t most wages double? Didn’t most incomes double—as measured in your new cheaper monetary unit?”

“But beef is a necessity of life! The poor can’t afford beef at a goldgram a pound!”